Cost of buying your first home
Cost of buying your first home
Buying your first home is exciting – but it’s good to know what you’ll have to pay for to make it happen.
Making a budget based on different costs you’ll pay is a good way of preparing for getting your first house. You’ll pay for:
- Your deposit
- Solicitor fees
- Stamp duty
- Mortgage costs
Use our guide to understand the first time buyer costs and fees you’ll pay, so you can make a detailed budget.
Averages costs are taken from The Money Advice Service.
First time buyer costs and fees
First time buyers usually focus on saving enough money for a deposit.
This is the biggest upfront cost involved in buying your first home, so it makes sense to save up for this first. A deposit for a first time buyer is usually a minimum 10% of the property value.
There are other fees you should consider too, including valuation costs, home insurance and legal or conveyancing fees.
Here’s a breakdown of the fees you’ll pay on your first home.
Aside from your deposit, you’ll pay fees to set up your mortgage, including:
- Product fee – This covers the price of setting up your mortgage and costs up to £2000. You can either pay it upfront to your lender or add it to your mortgage term.
- Booking fee – Often combined with the arrangement fee, this can be a separate charge for your mortgage application. Usually, this costs up to £250.
- Home valuation – Your mortgage provider will need to check the value of your home to make sure it matches your loan terms. This typically costs between £150 and £1,500.
- Administration costs – Some mortgage lenders will charge to maintain and eventually close your mortgage. This is paid before you receive your mortgage or as an exit fee, costing roughly £100 to £300.
- CHAPS – This is the fee mortgage providers charge to transfer your loan amount to your solicitor, usually costing around £50.
You’ll need to hire a solicitor or conveyancer to manage the legal work required to buy your first home. These legal costs are usually split into two categories:
- Solicitor fees – Solicitors will handle all the legal processes you’ll need to buy your first home. Hiring a solicitor can cost between £850 to £1,500.
- Land registry – Your solicitor will register your home with the Land Registry. This costs between £100 to £500.
There are other costs you should account for when budgeting for your first home, including:
- Home insurance – Lenders will require you to take out buildings insurance. The cost for buildings insurance varies depending on the provider and level of coverage you pick.
- Survey fees – It’s worth setting up your own property survey to see if there are any problems with the property. The price for a survey varies depending on how detailed it is.
- Moving house – You’ll also need to pay to move or store furniture. Moving costs depend on how much stuff you have and how far you’re moving. See our guide on the costs of moving house for a full breakdown.
First time buyers and Stamp Duty
Most first time buyers won’t have to pay Stamp Duty on their new home. You’ll pay Stamp Duty if:
- The value of the home you’re buying is more than £500,000.
- You, or someone you’re buying with, is not a first-time buyer.
Until the 31st of March, 2021, first time buyers will only pay Stamp Duty on properties valued at £500,000. Find out more about Stamp Duty.
Calculators & tools
We have a range of mortgage calculators to help you:
- Find out how much you could borrow from Lloyds Bank
- See how much you could save if you make overpayments on your mortgage
- Get an idea how a change to the Bank of England Base Rate could effect your monthly payments
Important legal information
Lloyds Bank plc. Registered office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales No. 2065. Lloyds Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 119278.
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